The Quoddy Tides

Eastport, Maine

2006 December 8

LNG developer eyes 300 acres of land in Perry

by Edward French

Quoddy Bay LNG is proposing to purchase just over 300 acres of land west of the Old Eastport Road in Perry from the Passamaquoddy Tribe for $1.5 million, or $5,000 an acre. The proposal was discussed at a November 14 meeting of the Sipayik Tribal Council and is expected to be considered by the Passamaquoddy Joint Tribal Council on December 13.

Some tribal members who oppose the land sale believe that the offer is another attempt by Quoddy Bay to get the joint tribal council to sign a tax exemption agreement for the company, which is proposing a liquefied natural gas terminal on tribal land at Split Rock. They also believe that the land is worth more to the tribe than the amount being offered.

Brian Smith, project manager for Quoddy Bay, says the land, which would be near the proposed LNG storage tanks in Perry, would be used as a storage and staging area during the construction of the proposed LNG terminal. "We're trying to do something to benefit the tribe in the short run and get them some money," he says, referring to cash flow problems the tribal government is experiencing. He says the amount being offered "is a good price in relation to the current valuation of the property," adding that Quoddy Bay is willing to put up nearly 10% of the price upfront.

According to Cliv Dore, a former tribal governor whose family used to own the property, there is a significant amount of rock on the land that could be turned into aggregate, or crushed stone used in construction, which he guesses could be worth $25 million to $30 million. Dore also says that his father, Stafford, had the land named a private game preserve, the Willow Water Game Preserve, by the state in 1942. The property extends from the Old Eastport Road to the Cannon Hill Road and west toward East Bay.

The purchase agreement drawn up by Quoddy Bay does not mention mineral rights, and Smith says the company is not considering removing aggregate from the site. The Department of Environmental Protection (DEP) regulates excavations and rock quarries, and Quoddy Bay will be seeking a Site Location of Development Act permit and a Natural Resources Protection Act permit from the department for blasting and the removal of ledge. However, an application is not yet pending and plans have not been finalized, according to Robin Clukey, the DEP project manager.

Quoddy Bay is also looking at acquiring other property in Perry or Pembroke to serve as temporary housing for construction workers, but those parcels have not yet been identified.

The sale of the land owned by the tribe would have to be approved by the joint tribal council, and both the land sale and the tax agreement are expected to be discussed at the December 13 meeting. Quoddy Bay is still trying to get the joint council to approve the Project Coordination and Tax Agreement. The joint council had voted to turn down the agreement last February, with all of the Indian Township councillors voting against it. The proposed agreement calls for the exemption of real and personal property taxes and the reduction of the Tribal Employment Right Ordinance (TERO) tax for Quoddy Bay. The tax exemption provisions would be in exchange for lease payments to Pleasant Point amounting to an estimated $12 million per year once the proposed LNG facility is fully operational at Split Rock.

"We're still hoping that the reservation will move forward with Indian Township" in approving the tax agreement, says Smith. "We hope it happens before Christmas."

Quoddy Bay LNG so far has not made any lease payments to the tribe. The lease agreement provides that Quoddy Bay would pay the Pleasant Point Reservation nearly $500,000 in a series of payments this year, but Quoddy Bay will not make the payments until the joint council approves the tax exemption. In August, Quoddy Bay did offer $200,000 for per capita distribution at Pleasant Point, but the offer, as presented, was not accepted by the Sipayik Tribal Council. The council wanted to be able to decide how the funds would be spent.

Vera Francis of Nulankeyutmonen Nkihtaqmikon (We Take Care of the Land), a group of tribal members who are opposed to the LNG proposal, comments, "Quoddy Bay LNG doesn't want to pay taxes, today or tomorrow, and has not to date even bothered to pay the Pleasant Point Tribal Council its already agreed upon payments, but yet they want more land. The tribe's lawyers mistakenly dismiss concerned tribal members as 'third parties,' when it's the company that is trying to exploit the tribe's current financial state that should be the party of concern."

Concerned about "selling off precious tribal resources" for the LNG proposal, she adds, "It's exploitive for the Smiths from Oklahoma to present their company as the tribe's last call for prosperity."